Advertising Provides Clues to Consumer Trends

What companies say in their advertisements can be a good guide to what matters to consumers.

The holy grail of a good advert is to be eye-catching, relevant, and persuasive. It has to stand out amidst the hundreds of advertising messages with which we are bombarded every day, it needs to address an issue that matters to consumers, and it has to affect behaviour, either by reinforcing the rightness of a decision made,  or encouraging a change in what or where a product is bought.

It is therefore interesting and instructive to see what the big advertisers are saying. That is not to suggest that they always get it right – frequently they do not, but, most advertisements are the result of thousands of hours spent listening to consumers and crafting messages which will appeal.

Many supermarkets have jumped on the British bandwagon in the wake of the horsemeat scandal. The IGD (Institute of Grocery Distribution)  tells us that trust in food manufacturers and retailers was dented by the issue, and their most recent research shows increased consumer interest in buying British with the proportion of people saying that “it is not important to me to buy British” dropping from 45% in 2007 to 22% in 2013.

Morrisons, as indicated by the advert above, have clearly decided, in the wake of the scandal that their unique position of buying direct from the farm and owning their meat processors, and their commitment to buying British beef, lamb and pork gives them a one up on competitors. They are undoubtedly right. So their message is relevant. Where it starts to fall down is that the way they say it is complicated. Consumers might ask themselves what exactly is meant by. Morrisons headline is “All the fresh meat we prepare in store is 100% British, 100% of the time”, but consumers might ask themselves questions like how much and what meat exactly  is not prepared in store, and they will be none the wiser if they take the time to read all of the words in the advert.

Morrisons also advertise the quality of their fresh food, as indeed they have done for some years.

The Coop takes a simpler approach to buying British with the headline – “All of our fresh beef is reared on British farms”.

And the Coop combines buying British with animal welfare in an advert saying that “All our fresh chicken is reared by British farmers to higher welfare standards”. Again, though, consumers might ask themselves what exactly is meant by higher welfare.

Which is not to say that price is unimportant. ASDA take the no holds barred approach – “We are 10% cheaper or your money back.”

Sainsbury by contrast go for the softer sell. Their message combines quality with a price, hence the beautifully photographed pictures with a teeny tiny reference to the price, so small it could easily be missed. It is difficult to criticise Sainsbury, their track record of growing sales and profits is sound. But perhaps here they are overly subtle.

What can we conclude?

Price will remain important to consumers but so, increasingly, will quality and provenance.

Ethical Purchasing - Inside the Consumer's Head

The Institute of Grocery Distribution has previously provided data about the 5 ethical issues that most concern people, these being Animal Welfare, Local/British, Environmentally Friendly, Fair Trade, and Organics. See blog of 7/3/08 "Whither Ethical Purchasing" for detailed data.

Now, for anyone interested in what goes on inside consumers minds as they make an ethical purchase, IGD has published findings on how and why consumers decide what to buy.

According to IGD, consumers work to 7 guiding principles:

1. Personal beliefs about what food is right and what isn't.

2. Whether food has been produced in a way that is fair to all involved, be it people or animals, both at home and abroad.

3. Worries about sustainability and whether due thought has been given to the environmental impact of food production.

4. A desire to leave the world in a fit state for future generations.

5. Concern about health and well being, particularly if young children are involved.

6. Food safety as it relates to where the food has come from and how it was produced.

7. What makes the consumer feel good at the time of purchase.

It has to be said that some of these findings look a bit vague, and although the IGD doesn't mention this, not all consumers will act on all these principles all of the time. However, they do support the general view that consumers are becoming more aware of ethical issues. They also give clues about why consumers make a particular decision, whether it's to support the environment, or to be sure that no person or animal was badly treated, or whether more selfish motives such as health or feeling good come into play. The findings can also help those thinking about how to advertise their produce develop an appealing message for their customers.

Supermarket Xmas Trading Shows Food Sales Resilient

The major supermarkets have posted their Xmas trading results, and its worth a burrow through the detail to see what they tell us about consumer spending, given the current economic gloom. People have to eat and indeed total food sales were well up v Xmas 2006 compared with all retail (everything from frocks to fridges) which was up just 1.4%. The question is whether belt tightening means a change in the type of food people buy.
Conventional wisdom, echoed by Justin King of Sainsbury's, says that at a time of tightened purse strings consumers will treat themselves to luxury food whilst cutting back on big ticket items, and it would appear that conventional wisdom is right.
With total food inflation for the period estimated at 1%, the league table of growth is led by Aldi at a whopping +12%. Whilst normally associated with low price food they said it was their premium range which drove the high sales. Morrisons was the clear winner among the "big four" supermarkets, coming in at + 9.5 %. Morrisons said the growth came from heavy advertising spend, and an emphasis on fresh food. Certainly they seemed to spend far more on advertising than other supermarkets, and much of the spend was behind their premium "The Best" lines. Next up was Waitrose, home of top quality, premium price products, with a 4.1% growth. Sainsbury reported figures for the 12 weeks to 5th January, and sales were up 3.7%. Their premium "Taste the Difference" range recorded its best ever quarterly sales growth. Luxury seemed to be the order of the day here with TTD Sherry Trifles up 154%, Courvoisier Butter up 232%, Salmon Fillets up 116%, and even Stilton up 43%. Sale of organic food was said to be strong, but no figures were given. By contrast, the basics range of low price food also grew, leading King to observe that growth came from "both ends of the basket". (Might explain the Aldi growth too). Somerfield grew by 4.7%, and Tesco by 3.1%. The one cloud on the generally strong story for food sales in general and premium food in particular was Marks and Spencer where sales were down by 1.5%. Sir Stuart Rose hinted that the type of food offered was out of line with consumer trends, and that he was planning radical changes, the first of which is the introduction of more specialised cooking ingredients such as smoked paprika and cinammon sticks. Which sounds pretty premium.
All supermarkets cut the price of many lines pre Xmas, particularly alcohol, and all warned that consumer spending would slow in 2008. Competition between supermarkets is likely to intensify which means a redoubled effort from the farming industry to ensure fair treatment for producers.

Consumer Support for Farmers

This is Arthur with one of his beautiful White Park cattle. We feature Arthur today to highlight new market research from the Institute of Grocery Distribution where consumers were asked what the food trade could do better in 2008. Encouragingly, the biggest number of mentions, 43%, said that the trade should do more to support producers in Britain. This number was higher even than that for cutting back on unnecessary packaging which has long been a consumer bugbear, and came in at 41%. These findings support a trend which has been seen for over a year now where consumers views of farmers have changed from highly critical to being very sympathetic to their plight. Its a feeling that has been picked up by the grocery trade who are spending alot of money advertising their support for British farmers.(See blog post " Morrisons latest to support British Farming on 6th November). Interestingly the research shows how stong is the Fair trade message with 24% of consumers saying that the food trade should do more to support producers in developing countries.

This support for British farmers is excellent news. However those in farming have to work hard to maintain this support. One risk is that with all the talk of higher food prices, grain being at a record price, and dairy farmers at last getting better prices, consumers think that everthing is ok in the farming world now, not realising the huge pressures that livestock farmers face. Every one in farming, especially leaders such as the NFU, needs to communicate clearly that yes, some farmers are doing better but alot are barely surviving.

For the more on the research go to http://www.igd.com/

Free Range Butter - udder madness?

Here's the latest Anchor butter advertisement. The small print at the top says "Merry Christmas from The Free Range Butter Company".

Now why would Anchor advertise itself as free range, something we instinctively associate with animals which can be intensively farmed, not milk based products. The guess would be that Anchor have done market research and discovered that consumers, many of whom are increasingly concerned about animal welfare don't like the idea of milk from cows which are kept indoors all year round and never get to roam grassy pastures. Of course this does not happen in New Zealand, Anchor's home, but it does in the UK. So, Anchor now has a point of difference from British butters that they can use to build their brand.

And the moral of the story? All milk is not the same, and thinking about the link between production systems and consumer trends can point up opportunities to grow a business.